[Pops]

Here are the forecasts of IEA & EIA for 2022, both as of 12/21







Peak Oil Barrel dissects the various reports put out by EIA etc and other stuff, lots of good comments in the box if you can follow, thanks to Ovi and Ron for these








Some Items:

IEA: Omicron variant will not upend oil demand recovery
Dec. 15, 2021
Emergence of the COVID-19 Omicron variant and the surge in new COVID-19 cases is expected to temporarily slow, but not upend, the recovery in oil demand that is under way, the International Energy Agency noted in its December Oil Market Report.
OGJ editors

https://www.ogj.com/general-interest/ec ... d-recovery

Russia’s weak December oil production signals lack of capacity
1/2/2022
(Bloomberg) --Russia failed to boost oil output last month despite a generous ramp-up quota in its OPEC+ agreement, indicating the country has deployed all of its current available production capacity.

With OPEC+ meeting in two days to consider output policy in the face of the fast-spreading omicron variant, Russia’s lack of growth highlights the limits of the group’s attempt to boost supply if demand continues to recover. Saudi Arabia, Iraq and the UAE can raise output, but others such as Angola, Nigeria and Kuwait are struggling to meet their quotas.

https://www.worldoil.com/news/2022/1/3/ ... f-capacity

In a first full interview since his appointment to the post in November 2020, Nikolay Shulginov told Moscow business daily Kommersant that the country’s oil and condensate production may rise to a plateau of 560.3 million tonnes (11.25 million barrels per day) in 2023 and 2024.

https://www.upstreamonline.com/producti ... -1-1096556

[global] Spare production capacity has shrunk significantly due to underinvestment, the head of Saudi Aramco said Nov. 9, warning that the potential rebound in jet travel and continued power plant demand for liquid fuels could create a worryingly tight market in 2022.

"Unfortunately, there is not enough investment in the sector to increase supplies and maintain that spare capacity," Aramco President and CEO Amin Nasser said at the Nikkei Global Management Forum.
He estimated that global oil demand would surpass pre-pandemic levels of some 100 million b/d next year. Jet fuel demand remains about 3 million-4 million b/d below where it was before the pandemic, and a recovery in air travel would quickly consume the world's spare production capacity, he said.

https://www.spglobal.com/platts/en/mark ... conference

Take those "few places," those heavily saturated core areas, the hearts of the two watermelons, out of the Permian Basin picture and America's last hope for long term oil supply and long term energy security goes from 4. 5MM BOPD down to less that 400,000 BOPD...
And remember, please, 70% of all Permian Basin tight oil production, from just those few counties, gets exported, most of it to Asia, some to China. In spite the bullshit from the tight oil sector and its paid cheerleaders, US crude oil exports offer very little benefit to the American consumer.
The public is being horribly misled about tight oil longevity and that our nation has enough tight oil reserves to spare, to export to other countries. We do not. Our children deserve the hydrocarbon option while the renewable transition occurs.

https://www.oilystuffblog.com/single-po ... few-places

---
This is a general thread for news and discussion of peak oil topics this year.

I think the big news for me is LTO growth in the US hinges entirely on the Permian and just a few counties at that. All other basins are either falling or flat and below their pre-pandemic high.——POB.

Conventional of course is continuing to decline as it has been since '72. Permian is the lone exception and has exceeded its previous max. Much of the Permian growth is coming from previously drilled well just now being completed. The number of uncompleted is falling fast and after that its back the the Red Queen.

This year could be interesting, can we exceed the previous peak or not. I would guess demand will exceed the previous high unless omicron's little brother is more deadly. IEA and EIA and KSA & RU all say there will be supply & stock builds this year but EIA and IEA have been dialing back their Dec. 22 projections just about monthly.

One thing for sure, forecasts of impending peak demand were as wrong as any peak supply prediction. In fact the IEA predicts no reduction in global oil supply and demand to 2050 except in the most extremely restrictive policy scenarios, in which the developed countries support all the countries that depend on exports and those that want to become "developed." We're more likely to bomb them back to the caveman days.

My WAG is for a few more years of supply growth... but I've been wrong before.

For as much energy news as you can stand: The Energy Bulletin by Tom Whipple

[AdamB]

Permian is the lone exception and has exceeded its previous max. Much of the Permian growth is coming from previously drilled well just now being completed. The number of uncompleted is falling fast and after that its back the the Red Queen.

<sigh>

Amateurs will never understand I guess. It is ALWAYS the Red Queen, and has been since Drake watched his well make less and less over the following days and weeks and months through September and October and November and into the winter in 1859. DUCs, new wells, old wells recompleted, offshore and on, discrete reservoirs or light tight oil from horizontal wells....there is no escape, there never was. It is never BACK to the Red Queen...she never left.

[Doly]

In fact the IEA predicts no reduction in global oil supply and demand to 2050

There is no way that can be true.

Since oil is finite, at some point we will see peak oil. If we see no reductions in demand (for whatever reason), even assuming modest growth, because it's hard for demand of anything to remain stable in a mostly capitalist economy, the amount of oil that needs to exist for the peak not to be reached till 2050 is just not credible, especially considering that discoveries keep getting lower.

[Pops]

Amateurs

[sigh]
Spare us.

The fracking of DUCs built up over 3 or so years and completed in the last 12 or 16 months is a one off. It's been why the Permian has been able to expand so rapidly and no other area has. Notice no other area built up such a backlog and no other has made such a resurgence. I don't know what the needed surplus of DUCs is to keep the thing rolling but it is apparently the 500-1,000 range. The level the Permian is fast approaching.

Something I don't know, though it appears to be available on ShaleProfile, is how many of those were in prime areas, and how many prime areas are left to drill

[Pops]

In fact the IEA predicts no reduction in global oil supply and demand to 2050

There is no way that can be true.

Since oil is finite, at some point we will see peak oil. If we see no reductions in demand (for whatever reason), even assuming modest growth, because it's hard for demand of anything to remain stable in a mostly capitalist economy, the amount of oil that needs to exist for the peak not to be reached till 2050 is just not credible, especially considering that discoveries keep getting lower.

I didn't say it was true, just that that is their forecast. This is from 2020, the 21 outlook says the same I just couldn't find a graphic.



They've been all around, they said "peak" back in the oughts prior to shale so I guess once burned twice shy, LOL

[AdamB]

In fact the IEA predicts no reduction in global oil supply and demand to 2050

There is no way that can be true.

It absolutely can. But the volumes aren't the trick...the trick is whether or not the world can withstand the price required.

Since oil is finite, at some point we will see peak oil.

Absolutely.

If we see no reductions in demand (for whatever reason), even assuming modest growth, because it's hard for demand of anything to remain stable in a mostly capitalist economy, the amount of oil that needs to exist for the peak not to be reached till 2050 is just not credible, especially considering that discoveries keep getting lower.

Assuming demand paths similar to what IEA/EIA/Rystad project to 2050 (call it perhaps 95-100 mmbbl/d at the mid-century point, crude and lease condensate) then the world absolutely can produce those types of volumes. It is absolutely credible. It has nothing to do with discoveries. It has everything to do with understanding why prior peak oil claims failed, and correcting for them.

[AdamB]

The fracking of DUCs built up over 3 or so years and completed in the last 12 or 16 months is a one off.

No, it wasn't. It was the second off. Because in the 80's I was collecting those companies and their DUCs that went bankrupt after the 1979 global peak, and made a living into the 90's completing those DUCs using old fashioned multi-stage slickwater fracturing of shale well stuff. Of course, it only became new again with the anti's decided to demonize a 50 year old completion technique(back then, now it is 70), but that's another story.

[Pops]

...especially considering that discoveries keep getting lower.

Speaking of which:

Global oil and gas discoveries in 2021 are on track to hit their lowest full-year level in 75 years should the remainder of December fail to yield any significant finds, Rystad Energy analysis shows. As of the end of November, total global discovered volumes this year are calculated at 4.7 billion barrels of oil equivalent (boe) and, with no major finds announced so far this month, the industry is on course for its worst discoveries toll since 1946. This would also represent a considerable drop from the 12.5 billion boe unearthed in 2020.

https://www.rystadenergy.com/newsevents ... 75-years2/

[Doly]

It absolutely can. But the volumes aren't the trick...the trick is whether or not the world can withstand the price required.

Things impossible with available technology remain technically impossible at all price points.

Assuming demand paths similar to what IEA/EIA/Rystad project to 2050 (call it perhaps 95-100 mmbbl/d at the mid-century point, crude and lease condensate) then the world absolutely can produce those types of volumes. It is absolutely credible.

On the grounds of theoretical technically recoverable oil? That's precisely why I started to play around with the LTG model. You can argue as much as you like that things are theoretically possible, but in reality, those theoretically possible things aren't. Oil stops getting extracted (except, perhaps, for the production of petrochemicals) well before reaching EROEI of 1:1, because low EROEIs impede technically feasible industry that uses oil as a fuel, even if the oil itself is theoretically technically recoverable.

My model was able to back-predict when the world switched from some forms of energy to others, based merely on available published EROEI information.

[AdamB]

It absolutely can. But the volumes aren't the trick...the trick is whether or not the world can withstand the price required.

Things impossible with available technology remain technically impossible at all price points.

Absolutely correct. But here is the rub. Back in the late 1990's the USGS published something to the following effect: All known and even unknown oil and gas accumulations are technically recoverable. The only problem was cost, as most folks don't have the perspective to envision oil at $1000/bbl.

There is no such thing as impossible oil and gas recovery, as stated by geoscientists from the same gang that deigned to let Hubbert into their club. They put it into print no less.

Assuming demand paths similar to what IEA/EIA/Rystad project to 2050 (call it perhaps 95-100 mmbbl/d at the mid-century point, crude and lease condensate) then the world absolutely can produce those types of volumes. It is absolutely credible.

On the grounds of theoretical technically recoverable oil?

Absolutely not. Economically recoverable. Can I presume you are familiar with resource cost curves?

That's precisely why I started to play around with the LTG model. You can argue as much as you like that things are theoretically possible, but in reality, those theoretically possible things aren't. Oil stops getting extracted (except, perhaps, for the production of petrochemicals) well before reaching EROEI of 1:1, because low EROEIs impede technically feasible industry that uses oil as a fuel, even if the oil itself is theoretically technically recoverable.

Oil extraction has never been bound by EROEI. Oil and gas development is bounded by economics. Charles Hall once assumed as you did, that net energy was the driver behind oil and natural gas production. Predicted the end of US oil and gas drilling by the year 2005, back in 1981. You figure he just did lousy professional researcher calculations compared to your independent ones?

I dump 1000 BTUs of natural gas (costing $1/1000BTUs) into extracting 100 BTUs of tar sand oil (sold at $10 per 100 BTUs) I make money hand over fist while suffering an EROEI < 1. I'll play that EROEI game from now to the time I have more money in the bank than Elon.

My model was able to back-predict when the world switched from some forms of energy to others, based merely on available published EROEI information.

Correlation isn't causation. And how well did it predict production from Saudi Arabia, using this energy metric? Venezuela? Russia? Can you discuss the price required to produce oil into the future, even at the volumes that you envisioned are available with what appears to be limited estimates of world reserves and resources?

I didn't even realize that the LTG model functioned with prices on resources, you had sort of given me the impression that it just used some made up oil and gas number and called it a day.

[Pops]

On the grounds of theoretical technically recoverable oil?

The key isn't total amount, it is rate of extraction.

Here is reserves to production. Theoretically 50 years at the current rate of extraction.
Note first that stated reserves miraculously never decline. Mainly because everything except reserves of US corporations are put out by governments. KSA has added no new discoveries but their reserves haven't gone down is years. OPEC quotas are based on reserves, so not surprisingly members lie so they get to pump more.



But note also that "reserves" treats all resources the same. So shale vs deepwater vs Ghawar vs tar are all the same. Add up all the reserves and divide by today's production volume and voilá as much as you want to 2070

Except they aren't all the same. That nice bump between 2010 and 18 is mostly tar sands in Venezuela. But they are producing, total, about half a million barrels a day currently compared to 100 million barrels a day consumed globally in 2019. At that rate it will take 1,000 years to extract those fossils.

So
a) reserves except publicly traded US companies are political BS
b) I have no idea how much US Corps BS but likely a lot.
c) as the sweet spots deplete, extraction is harder, requiring more technology, materials, labor and most of all
d) time

So Then: as the Ghawars water out the more difficult deposits are going to take longer to extract, IOW they won't be extracted in 50 years as the plot indicates but 150 or 200 at ever decreasing volume...

Peak extraction RATE = peak oil.

[AdamB]

On the grounds of theoretical technically recoverable oil?

The key isn't total amount, it is rate of extraction.

And the cost, and by extension a higher price, of any given rate.

Here is reserves to production. Theoretically 50 years at the current rate of extraction.

And there was NOT the resource to reserve conversion rate. Otherwise known as the thing that allows your graph to happen, because we know for a fact it wasn't new discoveries doing it.

Note first that stated reserves miraculously never decline.

The resource to reserve conversion ratio has nothing to do with miracles. It does touch upon one of the great fundamental misunderstandings of peak oilers though.

But note also that "reserves" treats all resources the same. So shale vs deepwater vs Ghawar vs tar are all the same. Add up all the reserves and divide by today's production volume and voilá as much as you want to 2070

"Reserves" are a subset of resources, and the two are most certainly NOT the same.

See folks here explaining it so even the most ill-informed peaker can wrap their mind around the concept. Plus, it is far easier to reference than [url=https://www.spe.org/industry/docs/PRMS_Guidelines_Nov2011.pdf] the system the professionals wade through.

So
a) reserves except publicly traded US companies are political BS
b) I have no idea how much US Corps BS but likely a lot.
c) as the sweet spots deplete, extraction is harder, requiring more technology, materials, labor and most of all
d) time

a) is incorrect, but based on the nonsense in the public space, it isn't a surprise amateurs would think so
b) by definition according to the second reference I provided, there is to be a 90% probability of occurrence that the answer is higher in a proven reserve, so call it 10% BS if you have no interest in characterizing it within the proper probabilistic expressions
c) everything depletes, not just sweet spots, and resource to reserve conversion rates also happen within the continuous accumulations, and as higher levels of depletion occurs, per unit costs do increase (do YOU know what a resource cost curve is Pops?)
d) Time is simply the clock by which all these particulars play out.

So Then: as the Ghawars water out the more difficult deposits are going to take longer to extract, IOW they won't be extracted in 50 years as the plot indicates but 150 or 200 at ever decreasing volume...

Peak extraction RATE = peak oil.

Yup. Peak extraction is peak oil. We're on #6 so far this century. Good thing they don't seem to have the zombie/long pork/MZB/Mad Max consequences that the congregation members thought it would.

[Plantagenet]

On the grounds of theoretical technically recoverable oil?

The key isn't total amount, it is rate of extraction.

And the cost, and by extension a higher price, of any given rate.

None of these things are the main issue facing oil production today.

We're going to hit peak oil, but not because of geological or financial or engineering limitations on production.

The key thing causing the imminent arrival of peak oil is going to be climate change.

We're right at the point where the effects of global climate change can't be denied any longer.

The planet is heating up even faster then the IPCC estimates. We've got huge forest fires all year long, tornadoes in December, massive hurricanes and typhoons, melting of the Arctic Sea ice, melting of Greenland and Antarctica, acceleration of sea level rise, etc. etc.

Its all happening right now...decades before climate models said it would happen.

Shutting down fossil fuel pipelines and ending new fossil fuel development is already a key demand of progressive Ds in the United States.

"Woke" banks and corporations are already refusing to fund new oil and gas development projects.

banks-that-refuse-to-service-coal-oil-industries

The movement against fossil fuel will only grow stronger as climate change brings higher and higher temperates and more and more disasters around the planet.


We will reach peak oil when governments move to stop the use of fossil fuels because of climate change

Cheers!

[Pops]

"Reserves" are a subset of resources, and the two are most certainly NOT the same.

I'm aware of the various categories, that reserves fluctuate as a function of prices and technology, etc but for my needs none of that matters. All I care about is the ultimate and the curve getting there. Lots of people who know way more than I ever will have taken a stab at it and been wrong. It may be, likely is, unknowable —but that doesn't prevent me from caring.

To lump tar sand in with the Permian and deepwater and MENA and Arctic and come up with one big number for reserves then divide by current production ignores that all are essentially different resources with different costs, methods and their own little curves. Like individual wells they peak and decline at different rates and times.

This chart illustrates. Looking out from 2000 in this chart, the green line of "everything" shows there is still more than 50% of ultimate production remaining— if all types are lumped together— and the headline reserve to production ratio might be 50 years implying no peak or decline. Except even if the ultimate were somehow an accurate guess, in 25 years the good old conventional which was 80% of production in 2000 has peaked and started decline, leaving tar and whatever else constitutes "non-conventional" to make up the difference. But of course they can't-or can't for long because their curves aren't the same as conventional. The "everything" line starts declining way in advance of the 50 year mark.

[AdamB]

To lump tar sand in with the Permian and deepwater and MENA and Arctic and come up with one big number for reserves then divide by current production ignores that all are essentially different resources with different costs, methods and their own little curves. Like individual wells they peak and decline at different rates and times.

You are pretty much spot on in this claim. And the answer is obviously to build all those differences in cost and production characteristics into any system making a future estimate.

This chart illustrates. Looking out from 2000 in this chart, the green line of "everything" shows there is still more than 50% of ultimate production remaining— if all types are lumped together— and the headline reserve to production ratio might be 50 years implying no peak or decline. Except even if the ultimate were somehow an accurate guess, in 25 years the good old conventional which was 80% of production in 2000 has peaked and started decline, leaving tar and whatever else constitutes "non-conventional" to make up the difference. But of course they can't-or can't for long because their curves aren't the same as conventional. The "everything" line starts declining way in advance of the 50 year mark.

Thank you for demonstrating that you know exactly why the systems used by the peakers are mostly just silliness. If you know it, the question becomes, why do such types of systems continue to be used? As just one example, the Canadian tar sands consist of 3 distinct geographic areas. One has no current development, one has two types of current development ongoing, one has a single type of development currently employed, with little liklihood of the 2nd. All of the resource sizes of the 3 areas are different, within the area with two types of development each size of those is different. The cost difference between the two types of development is known, in their current locations, but both must be extrapolated to the slight differences in depth and formation consistency in other areas. The estimates of resource size cannot be point estimates if you are honoring the multiple phases of development. A probabilistic relationship exists between the highly certain (proven) and less certain but known (economic resources, known resources, and technically recoverable resources) to the fully undiscovered (a USGS angle based on the work of Arps and Roberts from the late 1950's). The per unit costs changes in both directions, higher and lower because of economies of scale and time, capital investment to begin projects and some minimum IRR assumption (or a range, if you have the chops to continue the stochastic nature of this problem this deep into the system), including the tax subsidies available in Canada related to the global oil price. Which means now you have an exogenous feedback to the entire system, which can itself change future volume estimates.

This is just the Canadian tar sands. And for brevity, I've left out the items that are more mundane, but still important. It is so easy to explain you'd think that true peak oilers would have built one already, if they were truly serious in calculating peak oil.

[Plantagenet]

We must ban oil and all other fossil fuels now to prevent runaway global warming

its-unavoidable-we-must-ban-fossil-fuels-to-save-our-planet-heres-how-we-do-it

Save the planet.....ban fossil fuel now.

We can run the economy on wind, solar, nuclear and other non-carbon intensive fuels.

Every day that we delay banning fossil fuels just adds to the global warming problem.


Ban fossil fuels now!

Cheers!

[Pops]

It is so easy to explain you'd think that true peak oilers would have built one already, if they were truly serious in calculating peak oil.

Claiming such a level of specificity would be foolish. Incompatible, opaque, incomplete and self-serving nature of various official estimates of current production let alone total resources— not to mention yet to find— make predicting the URR at anything more precise than the grossest estimate silly indeed. And that goes in either direction.
Here from last year.

Different agencies

Different URR


The nice thing is, those curves illustrate that precision isn't really required. Doubling the URR estimate from Lahererre's 2,500Gb of conventional to EIA's everything estimate of 5,000Gb on that chart only nets an additional 20-something years before peak—even assuming all that tar could be mined in 100 years instead of 1,000.

The upshot to me is unless someone is hiding a big easter egg and not talking, we are close to peak. I haven't really thought that in a long time. As I expected, shale was the head fake that allowed a sneaky conventional peak and CoViD obscured it further. The next few years should be interesting. Not as interesting as peak 20 years ago would have been but entertaining nonetheless
.

[AdamB]

It is so easy to explain you'd think that true peak oilers would have built one already, if they were truly serious in calculating peak oil.

Claiming such a level of specificity would be foolish. Incompatible, opaque, incomplete and self-serving nature of various official estimates of current production let alone total resources— not to mention yet to find— make predicting the URR at anything more precise than the grossest estimate silly indeed.

Thank goodness you can tell the difference between the amateurs and the professionals by the latter's understanding of the necessary categories and data involved, the proper aggregation of the uncertainties involved within those inputs and the correct statistical expressions generated from the application of those inputs to the particular problem (time and volume), leading to obviously a reasonable stochastic estimate of the results.


Geez...makes you wonder why the amateurs don't focus on doing it the right way instead of all the nonsense you noted earlier?

[Doly]

Charles Hall once assumed as you did, that net energy was the driver behind oil and natural gas production. Predicted the end of US oil and gas drilling by the year 2005, back in 1981. You figure he just did lousy professional researcher calculations compared to your independent ones?

I think his research was quite good. I used his EROEI figures. I actually met him in the ASPO conference in Barcelona, and he wanted me to hijack a slot to present my modelling, which I refused because I hadn't prepared to give a talk.

I presume you are talking about this paper:

https://www.researchgate.net/publicatio ... d/download

You are clearly ignoring the line that says:
"The inclusion of Prudhoe Bay finds into this extrapolation would extend the time of intersection by about 6 years."

The issue with the paper is that it ignored the possibility of new discoveries. But discoveries now are so low, and declining for so long, that ignoring new potential discoveries probably won't affect calculations.

I dump 1000 BTUs of natural gas (costing $1/1000BTUs) into extracting 100 BTUs of tar sand oil (sold at $10 per 100 BTUs) I make money hand over fist while suffering an EROEI < 1. I'll play that EROEI game from now to the time I have more money in the bank than Elon.

That's exactly the problem with thinking in terms of money. It sounds plausible.

In the real world, however, money is a reflection roughly of the amount of work, capital and inputs that it takes to do something. So let's suppose that things were running as you say. Clearly, that natural gas is rather cheap, so it must be plentiful and need little capital for its extraction. On the other hand, that tar sand operation using vast amounts of gas is clearly using a lot of inputs for very little output. Some engineer is going to think: Hey, I could convert that cheap gas into liquids with just a little more capital, and then sell the liquids to the people buying from the tar sands, at a cheaper price.

That's how EROEI can predict how people switch from one energy source to another, in spite of not even touching the subject of money. Money doesn't have a straightforward equivalent to energy, but it does relate to it indirectly sufficiently to put a boundary on what sorts of energy source exploitation are economically viable. Fortunately, because if it turned out that you are right and I am wrong, it would mean that finance wizards could make industry grind to a halt, and nobody would move a finger till it all literally stopped. The second law of thermodynamics isn't something you can argue with in a court of law.

And how well did it predict production from Saudi Arabia, using this energy metric? Venezuela? Russia?

It didn't go into specific countries. The aim of my model was never to go into such specifics, but to answer some general questions related to the peak oil issue. If you are interested in such specifics, there are plenty of people that have modelled production of specific countries.

Can you discuss the price required to produce oil into the future, even at the volumes that you envisioned are available with what appears to be limited estimates of world reserves and resources?

No, since my model does not have anything in it about price, as price is a confounding issue for the questions that I was trying to answer. Prices fluctuate for all sorts of reasons, and simply add noise to the signal.

[AdamB]

I presume you are talking about this paper:

https://www.researchgate.net/publicatio ... d/download

You are clearly ignoring the line that says:
"The inclusion of Prudhoe Bay finds into this extrapolation would extend the time of intersection by about 6 years."

I clearly did NOT ignore that line. Oil and gas development in the US didn't grind to a halt in 2011 any more than it did in 2005.

The issue with the paper is that it ignored the possibility of new discoveries. But discoveries now are so low, and declining for so long, that ignoring new potential discoveries probably won't affect calculations.

New discoveries and the discovery processs modeling needed to NOT miss them was formally documented and published by Aarps and Roberts back in 1956/1957, if memory serves. Are you saying that Charles couldn't be bothered to do basic research on this effect and the consequences of his work nearly a quarter century after it was published? In your world of independent research, is such a miss considered good work? As far as reserve growth, itself a form of "new" discovery, Hubbert himself had built a modified Arrington function for the USGS that was applied in USGS Circular 725 (Betty Miller primary author) so that folks wouldn't make the mistake of not counting those volumes either. Are we to say that Charles does "good work" because as a fisheries ecologist he isn't required to know the most basic geoscience research on this topic? And therefore, when his system gets it wrong, we just give him a pass?

I dump 1000 BTUs of natural gas (costing $1/1000BTUs) into extracting 100 BTUs of tar sand oil (sold at $10 per 100 BTUs) I make money hand over fist while suffering an EROEI < 1. I'll play that EROEI game from now to the time I have more money in the bank than Elon.

That's exactly the problem with thinking in terms of money. It sounds plausible.

I didn't describe a process that "sounds" plausible, I described a process that forms the backbone of human activity across the range of all extractive industries. And incorporates the value difference in energy as well as scarcity of any particular type, all at the same time. Which EROEI does not.

Do you have a perspective you can enunciate that negates the value of the current system (or bests it in terms of real world modeling?) compared to EROEI that doesn't recognize the value differences between energy forms?

In the real world, however, money is a reflection roughly of the amount of work, capital and inputs that it takes to do something. So let's suppose that things were running as you say. Clearly, that natural gas is rather cheap, so it must be plentiful and need little capital for its extraction. On the other hand, that tar sand operation using vast amounts of gas is clearly using a lot of inputs for very little output. Some engineer is going to think: Hey, I could convert that cheap gas into liquids with just a little more capital, and then sell the liquids to the people buying from the tar sands, at a cheaper price.

You are exactly correct in how an engineer would think this ( ) We....excuse me...THEY...can be quite clever. That same engineer would also know that the market price point for that conversion might be about $125/bbl for the GTL process. And let the substitution process at a given price point begin.

That's how EROEI can predict how people switch from one energy source to another, in spite of not even touching the subject of money.

Except Charles couldn't predict anything like this at all. And because the switch occurs at a market price point (NOT an energy equivalency point), how does the EROEI process know when the conversion occurs without incorporating market price? Or cost?

Money doesn't have a straightforward equivalent to energy, but it does relate to it indirectly sufficiently to put a boundary on what sorts of energy source exploitation are economically viable. Fortunately, because if it turned out that you are right and I am wrong, it would mean that finance wizards could make industry grind to a halt, and nobody would move a finger till it all literally stopped. The second law of thermodynamics isn't something you can argue with in a court of law.

EROEI wants nothing to do with the 2nd Law. Because if it did, and properly incorporated the energy INPUTS as well as the outputs, EROEI would by definition be <1.

And how well did it predict production from Saudi Arabia, using this energy metric? Venezuela? Russia?

It didn't go into specific countries. The aim of my model was never to go into such specifics, but to answer some general questions related to the peak oil issue. If you are interested in such specifics, there are plenty of people that have modelled production of specific countries.

I am more than interested in the specifics, but not those systems handicapped by the limitations of their designers, or data, or budgets. Charles handicapped his system by ignoring even the most basic geoscience principles, and the expected happened. The EROEI system might have some value, somehow, and I am attempting to have someone familiar enough with it to say something that might juxtapose in a logical way with the system under which oil and natural gas production actually functions.

Can you discuss the price required to produce oil into the future, even at the volumes that you envisioned are available with what appears to be limited estimates of world reserves and resources?

No, since my model does not have anything in it about price, as price is a confounding issue for the questions that I was trying to answer. Prices fluctuate for all sorts of reasons, and simply add noise to the signal.

Prices do fluctuate for all sorts of reasons. And that noise you mention exists primarily above the cost of production, and the cost of production is something that economic models can be based upon. One final question...are you familiar with any equivalency between your EROEI work and resource cost curves in any way?

Thank you for your detailed answers.